Olympics funding brings new angst to Brit film biz
Fear lottery cash shift to 2012 eventLONDON -- The creative industries here are facing down a funding crisis following a government statement that puts the budget for 2012 London Olympics at just north of £9 billion ($17.4 billion), up almost fourfold from the £2.4 billion cost projected less than two years ago.
The ballooning cost of the Olympics was revealed Thursday by Culture Secretary Tessa Jowell, who informed members of parliament of the scale of the hike and the plan to pay for some of the rise with cash re-directed from other lottery-funded cultural bodies.
Jowell said that the government's contribution has risen to £6 billion ($11.6 billion), adding that the rest will be met from London's council taxpayers and the National Lottery.
The U.K. Film Council was first to react Thursday, in a bid to head off blind panic from a film industry battered by a slew of tough tax changes that have created an uncertain investment climate.
A spokesperson for the council said the organization is confident that -- despite plans that would see £7.5 million ($14.53 million) cut from its budget over the next five years -- it will be able to continue to support such industry activities as production and P&A support funds.
"Today's announcement by the secretary of state did not come as a big surprise to us and indeed all lottery distributors have been expecting to contribute toward the costs of the Olympics," a statement from the U.K. Film Council said. "We are confident that all U.K. Film Council lottery funded activity from April 2007 to March 2010, which will be announced next month in our three-year plan, will remain unaffected by today's announcement."
But observers did warn that come 2010, the film council will begin feeling the funding bite. A council insider said that the organization is unlikely to feel the pinch over the next three years because of its reserves and recoupment positions on successful movies that are beginning to trickle in.
Jowell told the House of Commons that the jump in costs is largely attributable to rocketing construction costs, rising regeneration and infrastructure costs for the capital and a hike in the so-called "contingency fund."
Jowell responded to immediate criticism for tapping lottery funds by saying the lottery will ultimately benefit from profit sharing based on increases in land values in the Olympic park area.
"London 2012 will bring huge financial gain to the whole country ... and it is only fair that the lottery good causes should share in any such windfall," she told MPs. "I am determined to ensure that this temporary diversion from the existing good causes to the Olympic good cause is done with the least possible disruption."